By Nashwan Sabrah and Nabeel T Alsohybe, published by the Macrothink Institute, June 2019, 17 pages, available at http://www.findevgateway.org/library/toward-better-resilience-during-war-crisis-case-study-three-microfinance-institutions-yemen
Since 2015, conflict in Yemen has impacted businesses in the country, driving actors in the microfinance industry to adapt the services they provide. Based on interviews with 11 individuals working at three microfinance institutions (MFIs) in the country, this study describes some of the challenges confronted by the MFIs and the actions they have taken in response. The challenges include customers’ declining purchasing power due to high inflation, leading to decreased repayment rates and less demand for new loans. Additionally, the displacement of many individuals from their homes has led to products such as group loans becoming less suitable.
To cope with customers’ evolving needs, MFIs in Yemen have implemented strategies including: (1) mechanisms to facilitate rapid product innovation; (2) flexibility for branches to respond in a tailored manner to local conditions; and (3) obtaining funding from government and NGOs to maintain operations.
Though the study focuses on how MFIs may adapt their strategies in times of conflict, these strategies can be considered by any MFI seeking to be more innovative.
By Jolene Khor, Research Associate
Sources and Additional Resources
Macrothink Institute paper: “Toward Better Resilience During the War Crisis: Case Study of Three Microfinance Institutions in Yemen”
http://www.findevgateway.org/library/toward-better-resilience-during-war-crisis-case-study-three-microfinance-institutions-yemen
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